Effects of european emissions trading system application to non EU airlines.

The European Union requires the application of an Emission Trading System (ETS) to all the flights arriving to or departing from EU airports beginning on 1 st of January 2012, according to the rules published in the Directive 2008/101/EC. Although actual emissions trading will take place in 2012 and on, part of the regulation started to be applicable in January 2010, in order to gather airline data that will be used for distribution of free emissions permits and for establishing the number of permits to be auctioned. EU carriers will have almost every flight included in the ETS, but non EU airlines participation will be limited to flights touching one EU airport, representing a relatively small part of their route system. However they are subject to the same administrative requirements, being obliged to submit Monitoring, Reporting and Verification (MRV) procedures to the EU Authority corresponding to the country with the most emissions from that carrier. This paper explores some of the most likely consequences for non EU carriers, coming from the entry into force of the ETS, both during 2010 and after 1 st of January 2012, when the system will start to be applicable. These effects may be classified in six categories: - strategies to obtain the maximum number of free permits in the first distribution, to be made on 2010 traffic basis - participation in the CO2 auctioning or other carbon markets elements, as a way to obtain additional permits when needed - other Kyoto Protocol tools for achieving additional permits (Joint Implementation, Clean Development Mechanisms) - fuel savings policies to minimise the number of permits needed since 2012 - new schemes for route evaluation, considering the repercussions of ETS - general planning (fleet and network) including carbon accounting As a conclusion it is shown that ETS application will have some unavoidable economic penalties and a non desirable administrative burden but, may offer a number of possibilities for minimising the negative effects of those measures and obtaining competitive advantages if airlines take early measures and elaborate the planning tools with enough anticipation

How to design Greenhouse Gas Trading in the EU?

Summary: A new and remarkable Green Paper about how to trade Greenhouse gases (GHG) in the EU has recently been published by the Commission of the European Union. This to achieve the stated 8% reduction target level. The Green Paper raises ten questions about how greenhouse gas permit trading should be designed in the EU before year 2005. These ten questions can be compressed into four main issues, namely target group, allocation of emission allowances, how to mix emission trading with other instruments and fourth enforcement. In the literature, there is a strong need to guide decision-makers and stimulate academic debates concerning the actual design of a simple and workable GHG market model for the EU. This model must take both economic, administrative and political concerns into account so that it is feasible in practice. Based on our findings, we therefore develop a policy recommendation concerning the future design of GHG permit trading in the EU.European Union; Energy policy; Greenhouse gases; CO2 emission; Permit trading design; Kyoto protocol; Electricity sector

Air quality management systems in urban regions: The case of the emission trading programme reclaim in Los Angeles and its transferability to Vienna

Clean air constitutes an essential element of the quality of living in urban regions. The discussion of how to manage air-quality in an era of shrinking public budgets and the trend towards deregulation has led to a rethinking of the present system in the urban region of Vienna. This paper is an attempt to contribute to these considerations by a comparative study of the "command&control" type of system operative in Austria (as regulated in the Austrian "Clean Air Act") and the new tradeable emission permit approach introduced in the urban region of Los Angeles (L.A.), California (the so called RECLAIM program) to reduce SOx and NOx emissions from stationary sources. The study utilized a survey of companies included in the respective pollution control programs in L.A. and Vienna, experts as well as administrators active in air quality management as a data base for the analysis. The survey is based on a mix of written responses to a questionnaire as well as personal interviews (conducted in 1996 and 97). Three main issues constituted the core of the analysis investigating the pros and cons of the approaches in practice: ? How much flexibility and discretionary latitude do the different policy systems grant the decision makers in the companies in the program to adopt the most efficient response to the request to reduce emissions? ? Which cost implications do the different systems have for the companies and the public management bodies? ? Which stimuli are provided in the long-run to innovate and promote emission reducing technical progress? Additionally the question was adressed which institutional changes were considered to have been the most troublesome in phasing out the old "command&control" type of system in L.A. and introducing the new RECLAIM program in 1994. Some basic propositions are developed how to introduce a tradeable permit system in the Vienna urban region. The results of the study do partly confirm some of the theses found in the theoretical literature, but offer additional insights on the institutional as well as political problems of intoducing a tradable emissions` permit scheme.

From eco-efficiency to eco-effectiveness: The policy-performance paradox

The internalisation level of sustainability issues varies among topics and among countries. Companies give up less internalised issues for more internalised ones. Discrepancies between legal, market and cultural internalisation lead to different escape strategies: firms develop a high level environmental management system and they have nice sustainability policy and reports. These achievements cover the fact that their total emission keeps increasing and they do not proceed in solving the most crucial global community or corporate governance problems. ‘Escaper’ firms are often qualified as ‘leading’ ones, as a current stream of research is also ‘escapist’: it puts too much emphasis on sustainability efforts as compared to sustainability performance. Genuine strategies focus on hardcore sustainability issues and absolute effects rather than on issues easily solved and having high PR effects. They allow for growth in innovative firms, if they crowd out less efficient or more polluting ones. They produce positive environmental value added when sector average eco-efficiency is used as benchmark and do not accelerate market expansion and consumerism

Some micro-evidence on the "Porter Hypothesis" from Austrian VOC emission standards

In the context of the discussion on the 'Porter Hypothesis', a sizeable amount of research has been devoted to empirical tests of the impact of environmental regulation on both competitiveness and innovation. The standard practice is to regress some measure of regulatory stringency on some measure of competitiveness and innovation across several industries and/or countries. However, possibly due to measurement problems, the results of these studies tend to be inconclusive and if any effects are found, these are usually rather small. Addressing the measurement problem, this paper uses highly disaggregated foreign trade data and data from a full survey of the Austrian paint, coatings, printing inks and adhesive industry to examine the impact of Austrian VOC emission standards on Austrian manufacturers of the regulated products. These standards are particularly interesting in that they are the most restrictive of their kind in the world and therefore an excellent case to study some of the issues raised by the 'Porter Hypothesis'. Based on various measures of RCA, I find no impact (i.e. neither negative nor positive) on competitiveness, which is also supported by the industry's own evaluation in the survey. I do find, however, that the regulations restricted imports. An important corollary of this finding is that the industry's current attempt to have the more restrictive Austrian regulation relaxed to the more lenient provisions of the European VOC directive may be counterproductive, since contrary to popular belief this may increase import competition rather than facilitate exports. Second, I consider various indicators of innovation based on evidence from the survey. I find that the regulation induced sizeable changes of firms' product range which vary by technological sub-segment. These changes are also reflected in a more dynamic technological environment. R&D spending to develop compliant products is found to be very unevenly distributed. While some firms spent virtually nothing, other firms devoted almost their complete R&D budget to compliance innovations. This result is mainly a function of technology and to a lesser extent of organisational factors. Moreover, there is evidence that the introduction of compliant products displaced or postponed existing R&D projects, again with substantial variations by technology. Finally, the survey produces evidence that compliance efforts yielded new ideas and allowed some firms to acquire new competencies and technologies, which they would not have acquired in the absence of the regulation. However, the latter finding is most probably due to technologically backward (small) firms catching up. To summarise, the survey evidence reveals considerable heterogeneity in how firms were affected and responded to the regulation. Partly, this is an expected result of a uniform command-and-control regulation, partly it indicates a differential ability of firms to adapt to an external shock. Although based on a very small sample, the paper points to interesting lines of enquiry that should be explored in future research.

Assessing the Feasibility of Nutrient Trading Between Point Sources and Nonpoint Sources in the Chao Lake Basin Final

This pilot project will determine the Feasibility of an effective point-nonpoint source nutrient trading program could be established in the Lake Chao Basin, Program's potential benefits, Framework and necessary elements for such a program

Testing Global Sectoral Industry Approaches to Address Climate Change: Interim report of a CEPS Task Force. CEPS Task Force Reports, 4 December 2007

Successful global sectoral industry approaches could become an effective means of broadening the range of contributions by all parties to greenhouse gas reductions, and of addressing competitiveness concerns in trade-exposed industries. This report puts these two hypotheses to the test and identifies the key requirements for global sectoral industry approaches to work. The analysis is based on ongoing work within a CEPS multi-stakeholder Task Force on “Sectoral industry approaches to address climate change”, supported by the Cement Sustainability Initiative (CSI) of the World Business Council for Sustainable Development. The Final Report will be published in spring 2008

The US Transit Bus Manufacturing Industry

Manufacturing buses for the US transit market has been a challenging business over the last several decades. It is a small market with volatile demand. Many manufacturers have gone bankrupt, left the market, or been acquired by competitors. Manufacturers of transit buses in the US must comply with a wide range of operational and design regulations. The most salient policy areas include regulating emissions, disabled access, procurement, alternative fuels, the Altoona Test, pooled purchases and piggybacking, spare ratios, workforce training, minimum useful life, Buy America, and research & development (R&D). The purpose of this report is to provide policy makers with an update on the state of the industry, an analysis of how government policies are impacting the industry, and suggestions for policies that can help the industry move forward and thrive to best serve the transit-riding public

Extra Financial Analysis – EFA: Environmental and financial performances of ABB, Akzo-Nobel and SCA: Picturing the business opportunities and risks associated to stakeholder perceptions and environmental and social prerequisites

External assessment of companies’ environmental aspects often focus on the existence of strategies, commitments, management systems and reporting of firms that concerns environmental aspects. Instead, in line with extra financial analysis, in order to play a role in decision-making, analysis of environmental aspects should incorporate the influence that stakeholders may have on future revenues of the assessed firm and how well advanced corporate strategies are in meeting these threats, turning them into business opportunities. Thereafter, the environmental information financial analysts’ use in their financial analyst reports as well as the relation between environmental and financial performance are illuminated. Three industry sectors, Chemicals, Electrical Equipment and Paper & Forest Products, are specially analysed in this report. Out of almost 4500 analyst reports about 36 percent contain environmental information, but when looking at industry sectors these numbers range from only 3 to up to 79 percent. The type of environmental information that the analysts focus on in their reports are on how firms’ products and product portfolios are adopted to Environmental regulations facing customers/markets, Customer demands and Eco-Efficiency. This product perspective is strongly related to discussions of business opportunities of the firm. In fact, a good 77 % of the financial analyst reports containing environmental information dealt with opportunities linked to environmental aspects. To a lower extent, financial analysts write about company specific risk issues like emissions and litigations while their reports is virtually absent from aspects like environmental strategies, policies, management systems, reporting and auditing. The correlation between corporate financial and environmental performances is illuminated through regression analyses. Industry environmental risk is found to be negatively correlated to corporate return on assets – ROA – (in an static model) while (when applying a dynamic model) corporate environmental performance and ROA have a positive correlation in the short term, which can find support by other studies using different data.Extra financial analysis; EFA; Financial analyst reports; Content analysis; ESG Framework; Return on assets; ROA; Environmental performance; Social performance; financial performance; Financial accounting; Non-financial information

Shaping the Global Arena: Preparing the EU Emissions Trading Scheme for the post-2012 Period. CEPS Task Force Reports No. 61, 6 March 2007

Having been underway for more than two years, the review of the EU Emissions Trading Scheme (EU ETS) is entering a decisive phase with the European Commission’s recent announcement that it will table formal proposals in the second half of 2007. Based on an assessment of the EU ETS, this new CEPS Task Force Report tests the performance of four different design models (a cap-and-trade system based on free allocation, benchmarks, auctioning and a credit-and-baseline system) against 10 criteria under three headings: environmental effectiveness, economic efficiency and the contribution of the ETS to achieving long-term climate change policy objectives. Based on this assessment, the report makes a number of recommendations in the area of allocation, creation of investment incentives and the merits of including new sectors and new gases. The report also addresses the particular challenge of completing the EU ETS review before a global post-2012 agreement can be reached, i.e. the EU ETS will be reviewed against an unknown global context